Hillary’s “Checkpoint Clinton” Tax Plan
Donald Trump made himself infamous to critics for saying he wanted to build a wall on the southern border and make Mexico pay for it. But Hillary Clinton deserves equal scorn for wanting to build a wall around American companies and make middle-class workers pay for it.
Earlier this month, Trump announced he would cut corporate tax rates from 35 to 15 percent, a plan that would go farther than the House GOP’s “A Better Way” tax reform proposal, which would reduce the corporate tax rate to 20 percent.
Clinton responded by doubling-down on her plan to keep corporate tax rates, which are the highest in the industrialized world, unchanged. Clinton also emphasized her plan to levy an “exit tax” on companies that want to escape America’s crushing corporate tax burden. Her authoritarian move would in effect construct an economic Berlin Wall around American companies and herd them through a “Leaving the American Sector” checkpoint.
Clinton’s move is surprising because reducing the corporate tax rate has long been considered one the smartest bang for the buck reforms in Washington.
It’s also an idea that has deservedly been embraced by some Democrats and many moderates and centrists.
For instance, in 2011 the organization ThirdWay, where Jim Kessler, former legislative director to U.S. Sen. Chuck Schumer (D-N.Y.), serves as senior vice president for policy,published a paper calling for corporate tax reform more in line with the House GOP and Trump than Clinton. ThirdWay argued today’s code is reflective of a “bygone time” that “encourages job creation — overseas.”
Apple CEO Tim Cook recently blasted the Left’s rhetoric on corporate taxes as “total political crap” and lambasted Washington’s inaction on tax reform.
“This is a tax code,” Cook told “60 Minute’s” Charlie Rose, “that was made for the industrial age, not the digital age. It’s backwards. It’s awful for America. It should have been fixed many years ago. It’s past time to get it done.”
According to the Tax Foundation, reducing the corporate tax rate to 20 percent would increase GDP by 2.9 percent while reducing the tax to 15 percent would increase GDP by 3.7 percent. Under both scenarios, tax receipts would actually go up by 0.3 percent due to increased economic growth. By comparison, the U.S. economy only grew by 2.6 percent in 2015.
Doing nothing to reduce the corporate tax rate while constructing a “Checkpoint Clinton” to discourage corporate inversions would hit middle class workers hardest. As the American Enterprise Institute’s Aparna Mathur and Kevin Hassett recently wrote in the Wall Street Journal, reducing the corporate tax rate is one of the best ways to end wage stagnation, which is one of the root causes of the upheaval of 2016.
Sadly, if truth is the first causality of war, policy is the first casualty of poorly run presidential campaigns. Trump could be making more of this issue. Clinton’s infatuation with East German economics has given Republicans in other races an opening they should exploit.
John Hart is the Editor-in-Chief of Opportunity Lives. You can follow him on Twitter @johnhart333.